The Housing Authority of the City of Asheville has learned that it won’t get nearly $17 million of tax credit financing to support the planned redevelopment of the Lee Walker Heights public housing community — at least not this year.
The North Carolina Housing Finance Agency announced its 2016 housing tax credit awards on Monday. In Buncombe County, only the Perry Lane Apartments project, which will create 120 units of affordable rental housing in Arden, received funding through the program.
Since tax credit financing made up 52 percent of the total estimated cost of the first phase of the Lee Walker Heights redevelopment, the future of the project is uncertain. Asheville Assistant Director for Housing and Community Development Jeff Staudinger says the outcome of the current round of financing awards is disappointing.
“We are waiting to hear from the Housing Authority,” Staudinger comments. “So far, we don’t know whether our application is still viable for next year, if there are interim steps that can be taken or what we could do to make possible future applications more competitive.”
Since low income housing tax credits are the only source of federal funding for large-scale affordable housing development projects, Staudinger says, it’s not surprising that the process was highly competitive. Of 140 applicants statewide, 46 projects in 36 counties received funding for a total of 3,243 affordable housing units.
The project team, which includes the nonprofit Mountain Housing Opportunities as the development partner, told City Council on April 26, “The viability of the project depends on the competitive award of the LIHTC funds.” Council agreed to contribute $4.2 million to support the development of infrastructure like roads and utilities. The project would demolish 96 existing public housing units on an 11-acre site at the foot of Asheville’s South Slope. New infrastructure and 212 units of deeply affordable and market-rate housing with community spaces would replace the antiquated, barracks-style row houses.
Xpress has requested comment from the Housing Authority and Mountain Housing Opportunities. This story will be updated when additional information becomes available.
Can anyone explain what $17 million of tax credits means? Does that mean the project could sell those credits to a large organization and get the profit from the sale, which would be less than $17 million?
Great question, Betsy. My general understanding is that for-profit corporations with tax liabilities can offset those by investing in tax incentive funds. The invested money directly offsets the corporate tax bill (rather than reducing taxable income). That money is used to fund low-income housing projects. So even though the name makes it sound like someone will get a credit for funding a project, it’s actually money that someone would have paid in taxes that is instead invested in housing. I am not clear on whether there are additional benefits to the corporation for participating in this program.
Thanks Virginia, I was trying to calculate how the dollar ratio worked. If you get $17 million in tax credits, what is it worth? Does that mean you get $17 million cool hard cash from some corporation needing to balance out $17 million in tax liabilities?
And can you find any details on the project that won in Arden? I can’t. Want pics and dollar amounts etc.
I think the Lee walker project exceded the affordable housing standards. It was very, very nice.
Betsy, I can only shed light on one part of your question, but perhaps it will lead you to other sources of information. Tax credit award winner list: http://www.nchfa.com/sites/default/files/forms_resources/2016%20Awards%20List.pdf
From the NC Housing Finance Agency website:
“Low-Income Housing Tax Credits
Authorized by Congress in 1987, federal Low-Income Housing Tax Credits (Housing Credits) now finance virtually all the new affordable rental housing being built in the United States. Housing Credit rental properties are privately owned and privately managed. In exchange for the financing provided through the tax credit, owners agree to keep rents affordable for a period of 15 to 30 years for families and individuals with incomes at or below 60% of the local median income.
The Agency operates the state’s Housing Credit Program as staff to the Tax Reform Allocation Committee, which consists of the Secretary of Commerce, State Treasurer and State Budget Officer. The Agency prepares an annual plan for allocating the credits (the Qualified Allocation Plan or QAP), evaluates applications for the tax credits and makes recommendations to the Committee. The Committee awards the credits. The Agency monitors the rental properties for the compliance period to ensure that they meet federal program requirements, as required by the Internal Revenue Service.
The owners are eligible to take a tax credit equal to 9 percent of the “Qualified Cost” of building or rehabilitating the property (excluding land). The tax credit is available each year for 10 years, as long as the property continues to operate in compliance with program regulations.
Generally, the privilege of using the credit is sold to an investor or group of investors (syndicated) and the proceeds are used to provide equity in the new rental development.
Equity from the sale of tax credits reduces the amount of debt financing that the property owner incurs. This reduces the monthly debt service for the property, lowers the operating costs, and makes it economically feasible to operate the property at below-market rents. Residents are responsible for their own rent payments, unless rent subsidies are available from other programs.”
Can anyone explain why all proposed new local housing developments feature late 1990’s like Grand Theft Auto artwork along with transparent humans who still cast shadows? All except the darker shadowed kid on the BMX bike- he doesn’t matter and most likely has a weapon.
the Housing Authority of Asheville and all their segregated projects are the biggest bloated blight on the whole city.
WHY do democrats always want to keep the poor people segregated like slaves on a plantation ?
“WHY do democrats always want to keep the poor people segregated like slaves on a plantation ?”
Funny you should ask that, when the entire point of redeveloping a complex likee Lee Walker Heights is to break up concentrations of poverty and to put job opportunities within easy reach of residents who most need them.
Perhaps if you weren’t so busy running into walls, shrieking about democrakkks and randomly capitalizing words, the obvious would be obvious to you too.
This kind of project does nothing of the kind and is NOT a taxpayer obligation. STOP creating future ghettos!
Redeveloping public housing does not create healthier neighborhoods and does not put job opportunities closer to low-income residents who need them?
Says who? You and the voices rattling around in your skull like marbles in a coffee can? Meanwhile, I can point to established examples of this very phenomenon working well in cities with much higher crime and poverty than Asheville. I look forward to you citing a source other than your own hysterical shrieking.
This housing project was bound for failure, especially with the three tax bills that the city council is proposing. Nobody is going to support a fourth, unnecessary tax increase.
Oh yeah, because they ARE the ORIGINAL party of SLAVERY !
So WHAT will CITY do with the previously allocated (or already paid ?) $4.2 MILLION promised to the housing authority thieves?
Can we PLEASE put that toward some street repaving and repair in the CITY ??????????????????????
nO.
Why are Ashevillians so interested in placing affordable housing downtown? The land is incredibly valuable and the location is poorly suited for the purpose. It would seem that affordable housing would be better suited near strip malls or box stores which offer affordable goods. Living where you work is a great idea but let’s not pretend that downtown offers what people on a budget need.
Duke – you are just far too rational……that’s your problem. ;o)
Downtown benefits from having a range of incomes among its residents because a range drives the need for a range of good and services that would otherwise be completely subsumed into the “all luxury, all the time” development scramble. That’s already happening in Asheville precisely because city leaders haven’t paid enough attention to anyone other than the rich.
Also, Lee Walker Heights and other housing projects only even exist because other neighborhoods were torn down, and their residents placed in these charmless barracks. Exactly how many times would you like to repeat that mistake? Is the ultimate goal to chase these people all over town until they give up and move away?
the ultimate goal should be to PHASE OUT public housing projects and MAINSTREAM these people into market available housing! THAT is the GOAL! THIS is the VERY PROBLEM we have with the AVL housing authority, they NEVER work to CUT back on public housing because their ‘jobs’ are VERY highly paid by TAXPAYERS!
You don’t think redeveloping concentrations of poverty into mixed-use, mixed-income neighborhoods isn’t mainstreaming public housing residents into the broader economy and into civic engagement?
Why?
NO! this does nothing for that. it’s just pretty words for recreating the S.o.S…it all ‘sounds’ good but it will always be stigmatized subsidized housing regardless…sick of paying other people’s rent!
Call me narrow minded but as a person who doesn’t qualify for subsidized housing, I would not live in a place in which drug deals were regularly going down out in the parking lot. If you want a true demographic mix the best thing you could do is require drug tests of those receiving housing subsidies in “mixed income” places.. The good people who receive subsidies don’t want to live next door to a druggie and/or dealer anymore than I do. Better to concentrate ALL the druggies in Pisgah View and let the non druggies have the better places.
“…it all ‘sounds’ good but it will always be stigmatized subsidized housing regardless…sick of paying other people’s rent!”
So… The fact that this strategy has already worked, more than once, in other cities — the fact that this strategy has resulted in healthier neighborhoods, lower crime, and higher property values — means nothing to you? Reality just can’t compete with the ideological bees buzzing around inside your skull?
CKKKolor me UNSURPRISED.
because , Duke Papas…democrackkks want to keep the poor segregated and right in the middle of the most valuable property,
so it brings down values on everything around it…if not intended, that is what affects VALUE. that’s another reason to call them thieves.
REAL resort cities do NOT have this public housing problem in their cities.
Who said Asheville is (or should be) a “resort city”? I’m glad that City Council still wants this to be a place that working people have a right to live in, not just the rich.
those places have working people too without subsidized housing, but then those would be towns / cities never managed by elected liberal progressive democrackkks for the past century. America’s cities in BIG trouble are ALL run into the ground by democrackkks for the past century…
Somebody wants to turn Asheville into the eastern Aspen, just with two ‘s’ es.
I hear this project costs 300 grand per additional unit. That is absurdly expensive and no way is it worthwhile. Definitely we can build more units with the same money some other way.